Profit Margin Calculator

Calculate Your Profit Margin

Knowing your profit margin on your products is important because it helps determine whether the product is profitable to produce/buy and sell. It also helps in setting the product price and making decisions regarding marketing efforts on individual products or categories.

In the calculator above, simply enter your cost price excluding VAT and your sales price to customers including VAT – it will automatically calculate your profit margin in percentage, your profit in percentage, and your profit in kroner ex. VAT.

Total Profit Margin on a Bulk Offer / Quantity Discount

If you receive a request from a customer wanting to buy many units of a product, the calculator above is perfect for you. When you enter the cost price and sales price in the top section of the calculator, the bottom section is automatically filled out, and you can then change the sales price ex. VAT and the number of units.

For example, if you need to sell 500 units of a product and want to give a discount, you can lower the sales price ex. VAT with this calculator and see the total bulk discount in kroner and percentage.

You can also see the total revenue and total profit in kroner and percentage.

Always Calculate Your Key Figures Excluding VAT

You should always calculate your profit margin and profit excluding VAT. VAT is not your money; it is offset against your purchase VAT, and the positive difference must be paid to the tax authorities.

If you are selling from Denmark to abroad, you will in some cases not charge VAT – so it is always best to calculate your profit margin excluding VAT.

Product Pricing

It is important to consider any duties and other costs associated with a product before setting the price. This could include shipping and handling fees, customs duties, or packaging costs. The sum of these costs should be deducted from your sales price to determine your real profit.

What Does Profit Margin Mean?

Profit margin is a calculation of how much percentage of the sales price constitutes your profit.

For example, if you sell a product for 150 DKK incl. VAT, which you bought for 40 DKK ex. VAT, you have a profit of 80 DKK ex. VAT and a profit percentage of 200%.

But what is the profit margin in this case? Well, the 80 DKK, which is your profit, makes up 66.67% of the sales price – so your profit margin is 66.67%.

Your profit margin can NEVER be 100% or higher. (It can only be 100% if you received the item for free)
Your profit can BE 100% and higher!